Yesterday's release of the latest Consumer Price Index (CPI) data reveals that Canada's annual inflation rate has cooled to 2%. This has long been the target of the Bank of Canada. This bodes well for an additional interest rate reduction with the next BOC announcement on October 23. As always, this is both good and not so good news...Good for young Canadians wrestling with mortgages and credit card debt...not so good for Canadian Seniors with savings invested in cash accounts.
That aside, Canadian Seniors will see an increase in their monthly OAS benefit beginning in October. OAS monthly benefits are reviewed quarterly and revised if the average monthly CPI for the most recent quarter exceeds the average monthly CPI for the previous quarter. The monthly benefit doesn't increase every quarter but it doesn't go down if quarterly data indicates no inflation or even a reduction.
The October benefit is based on the average monthly CPI for May, June & July over the months of February, March & April if this later period resulted in an increase for the July benefit, which it did. This data indicates an increase for the October payment of 1.21%. As Service Canada uses only a single decimal for their math, they round the 1.21% UP to 1.3%. They're obviously on to the fact that if they rounded down they could be accused of not complying with the established formula.
Sooooo, Canadians aged 65-74 will see their monthly benefit rise from $718.33 to $739.88 and those 75 and over will see a bump from $790.16 to $800.43.
Next up. Projections for CPP Benefits for 2025.
